Open Banking – a roadmap for what is to come

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This article was written by Stuart Fuller and Lauren Murphy.

Roadmaps are useful when you get to a junction, where the path is unknown, and the choices are plenty – and in the world of data, there are many junctions. 
The Treasurer announced in the Budget that "the Government will introduce an open banking regime that will increase access to banking product and consumer data by consumers and third parties, if the consumer consents" and that "the Government will commission an independent review to recommend the best approach to implement the open banking regime in Australia to report by the end of 2017."  
The Open Banking issues paper, released on 9 August 2017, is the start of this process.  Although the focus is on banking data, the Productivity Commission, in their May report on data availability and use, recommended a "comprehensive right" to improve consumer access to data held by organisations of all kinds. The inquiry report will likely pave the way for implementation of the comprehensive right across other industries such as utilities, TMET and health.
The Issues Paper sets out three key threshold issues that the review will have to tackle:
1.   What's in and what out?
2.   How should data be shared and under what framework?
3.   When will it be implemented and who pays?
In answering these threshold issues, a roadmap will become clear. Below we have set out what the issues paper expects the review to examine, explore and determine when attempting to tackle these threshold issues. 

1.   What's in and what's out?

As a threshold question, the review will have to look at what data is 'in' and what data is 'out'. The issues paper highlights the need to determine what data should be made available and to whom.  Focusing as a first point of call on what data will be needed to provide innovative products and services to consumers and at what cost. The paper also mentioned that with the advent of increased portability, the review will need to consider how to ensure that customers are properly aware of the terms of access and use of their shared data. 

2.   How should data be shared and under what framework?

The second threshold question for the review is what data transfer model should be used and how to best define those standards. The review will have to weigh up the need to have the flexibility to transfer data to those who can provide the most benefits to consumers but also the security and protections needed for the data transfer process. The review will look to construct a realistic framework for implementation. It will do this by considering traditional regulatory models – such as the mandates in the EU and UK as well as more alternative models like licensing regimes and industry-specific legislation. In particular, the review will consider the extent to which an open banking framework (including policies, legislation, standards and infrastructure) can achieve the appropriate balance between economy-wide standardisation and necessary industry level adaptation – where the review lands with this will be a very interesting space for other industries to watch. 

3.   When will it be implemented and who pays?

The final threshold issue for the review will be how to ensure timely implementation while also minimising the cost and burden on the banking industry and building consumer trust – something that doesn't occur overnight. The implementation of an Open Data regime is by no means an easy feat for any government to tackle. For example, the UK first started their Open Banking Working Group in September 2015, and we will have to wait till 2019 for their standards to be implemented. The review will set out a timeframe for achieving an open banking regime including recommendations on what entities and systems if any, should be established to develop the architecture to support the regime.  The issues paper also recognised that the review will have to focus on the cost of implementation determined by factors including the scope of data to be shared, the flexibility of technical solutions to meet security needs, the resolution of legal issues and the timing of when data is to be released. 
Submissions are due on the 22nd September 2017. If you want to be part of shaping the Open Data roadmap – in any industry, please contact our KWM Partners. 

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